August 2, 2013 / 12:57 PM / in 4 years

TSX makes modest gains on stronger banks; posts weekly loss

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch

TORONTO (Reuters) - Canada’s main stock index rose slightly on Friday as disappointment following a weaker-than-expected U.S. jobs report was offset by gains in the financial sector, but it ended the week lower.

The market was also weighed by a 6 percent decline in SNC Lavalin Group Ltd (SNC.TO) after the engineering and construction company reported a quarterly net loss and lowered its financial forecasts for the year, hit by charges taken on projects in two North African countries.

Data showed a slower pace of hiring by U.S. employers in July but a fall in the jobless rate, conflicting signals that could make the Federal Reserve cautious about drawing down its huge economic stimulus program.

One could call it ”the Goldilocks number,“ said Allan Small, senior investment advisor at Dundee Wealth. ”It’s not too hot, not too cold, but just right.

“The Fed may still begin tapering in September, but now it’s not so much a foregone conclusion,” he added, referring to the U.S. central bank’s withdrawal of economic stimulus.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 9.29 points, or 0.07 percent, at 12,603.25.

The Canadian market, which shed 0.4 percent this week, has sharply lagged U.S. stocks this year.

Investors are very negative about Canadian equities in general, and commodities and precious metals in particular, Small said.

Six of the 10 main sectors on the index were lower.

The materials sector, which includes mining stocks, gave up early gains to fall 0.8 percent. Gold miners were down 1.5 percent.

Barrick Gold Corp (ABX.TO) slipped 0.5 percent to C$17.37 and Goldcorp Inc (G.TO) lost 1.4 percent to C$27.99.

But financials, the index’s most heavily weighted sector, gained 0.4 percent.

Royal Bank of Canada (RY.TO), the country’s biggest lender, advanced 0.8 percent to C$64.43, and Toronto Dominion Bank (TD.TO) rose 0.7 percent to C$87.37.

Shares of Turquoise Hill (TRQ.TO), owned by Rio Tinto (RIO.AX), shot up 8.7 percent to C$5 after Mongolia’s prime minister said Rio Tinto need not seek parliamentary approval for a $4 billion financing package to fund development of an underground mine at the Oyu Tolgoi copper project.

Editing by Peter Galloway and Dan Grebler

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